Avaya-Nortel Confirms Product Road Map, Will Preserve Data Portfolio

It will also maintain Nortel's data networking portfolio, offer VARs both Nortel and Avaya options for SMB-centric IP and unified communications suites, and will decide on its future distributor relationships by the end of March.

Details of the road map, confirmed to Channelweb.com in an interview with Todd Abbott, Avaya senior vice president of sales and president of field operations, were provided to Avaya and Nortel VARs and distributors under nondisclosure agreements last week and in some cases, earlier this month.

Overall, the road map suggests Avaya is attuned to not disrupting the sizable Nortel installed base, and at least in the short term, is committed to keeping much of both existing portfolios intact -- even if it means product overlap in some segments.

Avaya Aura -- the company's virtualized unified communications platform -- will be the centerpiece of much of its product go-to-market strategy, as Avaya itself has been saying for the past year.

"The feedback, as we'd hoped for, has been positive," Abbott said of his discussions with Avaya and Nortel partners. "There's a really strong blend of the two product lines, and we've been impressed with the technology we've seen from Nortel. ACE [Nortel's applications/services integration environment], for example, fills a void for us in an application layer to interface with our SIP session-based architecture. That was something we had developed, but what we have is nowhere near ACE. There are a lot of products like that, and a lot are very good for our architecture and very complementary."

VARs have been telling Channelweb.com since at least Avaya's Americas Partner Conference in Nashville that optimism on Avaya would depend on how Avaya executed on the Nortel product and channel integration. Here's what they'll know as of Tuesday:

Products

The current road map has Avaya planning to end-of-sale three products in the Nortel portfolio, and one in the Avaya portfolio.

From Nortel, Avaya will end-of-sale the Nortel dialer ("a point product," Abbott said), the "m" version of the CS1K communications server line, and the 5300 model application server.

The fourth product to go is Avaya's Contact Center Express, in favor of Nortel's CC 7, which Avaya will now use as its principal midmarket call center offering. Elements of Contact Center Express, Abbott said, will be integrated into CC 8 -- a future version expected to be finished within 9 months.

All four products will go through Avaya's end-of-sale process, which means they'll be sold for six more months and serviced for six more years, as they're gradually phased out of the overall portfolio.

"We're not creating any issues for customers thinking the infrastructure they've invested in is now outdated," Abbott said. "There's really no investment protection issue for our customers and partners, who can migrate and evolve their infrastructures over time."

Abbott acknowledged that there will be substantial overlap in some product categories. For example, Avaya will continue to offer both Avaya's IP Office and Nortel's Business Communications Manager -- SMB-geared products similar enough to elicit VAR doubts there'd be room left for both.

"Our message to the market is that both of these products are going to be retained and investment will continue in both," Abbott said. "We want to make it smooth so that we can move to a consolidated platform over time."

Abbott said he wasn't worried that minimal changes to the Avaya and Nortel portfolios would confuse partners. Minimal disruption was precisely the point, he argued.

"Two product lines and only four end-of-sales. That's pretty significant," Abbott said. "Nortel fills in some voids that we had as well and Avaya fills in some voids that they had. The first phase of the process was to align as much as possible on the SIP-session-based architecture, and there was great commonality relative to where both teams thought the technology needed to go. There was a lot less protectiveness between [engineers] than you might think."

Nortel partners joining Avaya will go through authorization and certification on Avaya products, and existing Avaya VARs will need to do the same on Nortel products.

As Avaya described at the Partner Conference, it's created a new badge for Nortel's data networking portfolio. Avaya has opted to preserve Nortel's entire data networking line, despite rumors that it would look to sell it or spin it off based on the fact that Nortel's market share in data networking is dwarfed by those of HP and Cisco.

"This is critical for us," Abbott said. "Today we compete with a two-box solution. If you're going to judge us based on the R&D required to be a full-fledged router and switch company, those concerns would be valid. But we're not looking to be a complete end-to-end data provider -- you're not going to see us in carrier-based routers and switches. We need to be a fit-for-purpose data provider. Unified communications and contact center is where we will focus our R&D investment. Those are our primary business. The data products complement that and enable it, but it doesn't mean I have to have all the point products in the data portfolio."

Services And Distributors Services

Abbott acknowledged that Nortel's and Avaya's services strategies were "very different," but he referenced the expanded VAR programs around services that Avaya put in place last fall.

Some of those programs -- one, for example, enables VARs to offer private-label managed services -- have given Avaya a new indirect services story that simply didn't exist at any substantial level in the past.

"A lot of Nortel partners have a traditional TPM- [third party maintenance] based services go-to-market," Abbott said. "But as you move to the IP world, it becomes much more of a self-serve, 1-800-Tech-Support software and support model where on-site services are less of a requirement. That's part of the challenge for us. But our message to partners is that we're not going to be competing with them. We need to collectively go to work. We have been planning to migrate around Avaya support, and unbundle what before was a very closed support model."

Abbott's message to Nortel VARs fearing their services margins will evaporate is, 'Don't be afraid.'

"Our new design points are very much partner-enabled," he insisted. "We'll take the managed services competencies that Nortel had and make sure they're in line with the tenet of our strategy, which is partner-enabled managed services. We don't want to be in the direct managed services business."

Distributors

One of the big questions for Avaya is what it plans to do with the distributors -- especially Ingram Micro and Tech Data -- that have strong Nortel lines. Some tough decisions may await Avaya, which has been holding discussions with distributors on an ongoing basis and plans to disclose which relationships it will maintain by the end of March.

"We will spend the next two-and-a-half months studying our distribution coverage model and what it needs to look like three to four years out," Abbott said. "Obviously, there's some overlap, and that comes from the Nortel channel. Our design point is to make sure we don't over-cover the market while realizing that some of these distributors are quite strong from a multinational and global perspective. Our goal is much longer-term, higher-value distribution."

Of existing Avaya and/or Nortel distributors who will remain with Avaya going forward, Abbott confirmed only Westcon Group as a sure thing.

"It's not wise for me to even consider a move away from them. They're becoming our largest distributor," he said. "It would be impractical, which is not meant to be a backhanded compliment -- they're a real key asset."

Does the same hold true for other distributors?

"It's hard to say," Abbott continued. "Some of these products are not necessarily ready for broadline distribution. This is a high-value business. Having said that, there's still tremendous value in having those, and the breadth of coverage [broadline distributors] can offer is extremely important to us. I go into this process without preconceived notions. We're not going to string this thing along."

What about ScanSource's Catalyst Telecom, which does strong Avaya business?

"I think the answer is, 'Yes,'" Abbott said. "They have to do more internationally for us, and they're making moves to do that. Moving from distributor to distributor is a complex process, and given the complications of business, the last thing you want to do is make changes for your reseller who depends on a distributor."

Abbott suggested that VARs should continue to lean on their distributors for information, and also make use of Avaya call centers and Web resources for getting answers to Avaya-Nortel transition questions.

He extolled Avaya's ability to have completed the acquisition and come public with a product road map in a short time, and said Avaya will be announcing new products in the second quarter, as well as ongoing support for its newer partners.

"Because it was a bankrupt company, there's lots of planning that we were able to do ahead of time, and that's helped us be comprehensive," Abbott said.

As for Avaya, "What we've been doing since we went private is rewiring this company for speed. If you set the pace for execution in the industry, you typically win."

Avaya is scheduled to hold a conference call for media and analysts on the Nortel product integration at 11 a.m. EST, Tuesday, and a virtual conference at 1 p.m. EST, Tuesday. Watch this space for analysis and views from the channel throughout the week.